Session 29 – Emily Guy Birken

Recap

Emily has a Masters in English education and taught high school. She became a personal finance writer starting with PT Money.com. Her dad was a financial planner.

Abundance is a mindset. You can experience abundance on a fixed income or scarcity while making six figures. It’s about your mindset. Don’t put your money in control instead of trusting yourself. I have enough and I am enough.

Giving up your earned income is stressful.

$75,000 per year is the minimum you need to live comfortably.

It’s freeing to feel abundance within yourself instead of relying on your money.

If we focus on what we have we’re less likely to worry about what we don’t have.

It’s easy to buy our way out of problems. It’s important to practice frugality so you’re first thought isn’t about money.

In our culture we tend to chase things. We don’t take time to appreciate what we have in our lives. If we focus on what we have, we’re less likely to focus on what we don’t have.

Rules of thumb provide a starting point for people who otherwise might not think about retirement.

Assuming that you need a million dollars is not helpful. Per a 2013 article in the WSJ19 out of 20 people will never save that much so it can be discouraging.

What do you want your retirement to look like and then figure out how much it will take? Don’t get the money and then figure out what you want to do.

People are not wired to plan ahead. Moving to a pension-less society means we are on our own. If we individually embrace this fact, it can be freeing.

Even those with pensions run the risk of pension funds running into difficulty.

You are ultimately responsible for your money decisions. This goes against our inclination to have someone else take over.

Her book, Making Social Security Work for You, is about understanding what Social Security is and how to maximize your benefits.

Instead of relying on the break even analysis to justify taking benefits early, where you “win” if you die young, think of Social Security as an insurance program which can protect you against the risk of outliving your money.

At 62 you can still work whereas if you retire early, that option will become more difficult.

Social Security is not currently in danger of going broke. But the trust fund will no longer be fully funded in about 20 years. This means that the Government will have to take some remedies.

There are a few good reasons to take Social Security early: you lose your job and simply need the money; you do not have longevity on your side; or you want to fund a gift. The one bad reason to take it at 62 is that you did not research it.

Considering the huge number of people who take Social Security it is unlikely that they all thought it through.

Women in particular need to consider maximizing their Social Security because they are vulnerable to outliving their savings.

Social Security is not going to run out of money but it is true that the trust fund will be depleted in 20 years. The amount of taxes in 2033 will only pay 75% of benefits. We have time to fix this.

What are we going to do with an abundance of time in retirement? We become tunnel focused on what we don’t have as much of – money. We become discouraged because we can’t do what we envisioned doing. It’s about finding the right balance between work and what you like to do.

We are binary thinkers. There’s work and then retirement. It’s important to build a life during your career. This can help make it more palatable to extend your career.

Emily considers Warren Buffet to be her role model because he does what interests him. She wants to build a life she loves and that includes writing forever.